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5 steps for starting a business

Start your self-employment journey successfully: Here you can find the most important steps to make your individual start-up project a success.

1. Register your business

Before you set up a business in Germany, you must complete a number of formalities. These also depend on whether you want to work on a self-employed (gewerblich) or freelance (freiberuflich) basis. Freelancers must register with the tax office (Finanzamt). If you want to register as a self-employed entrepreneur, first contact the local trade office (Gewerbeamt). The Authority Finder (Behördenwegweiser) will guide you towards the authorities you will need to deal with and will tell you where you can find them in your area.

Please beware

Dealing with various authorities might cause difficulties. Nevertheless, you should try and make use of their support. That is the reason why you should be well prepared to receive help in the most efficient way. Complete the formalities in good time. Most importantly, do not be scared off by the bureaucracy and inform yourself of mandatory registrations and approvals in advance!

2. Pay taxes 

When you set up a business in Germany, you must also pay taxes to the tax office, i.e. the local authority of Germany’s fiscal administration. The type of taxes you will need to pay depends i. a. on your company’s size and legal structure as well as the amount of revenue.

An overview of the various tax types can be found on the start-up portal. You will find further information on taxes in Germany on the websites of the Chambers of Commerce in Hamburg (in German).

In addition, an annual tax return for your business, in which you disclose all earnings and the turnover, must be submitted to you tax office. 

Tip

Seek advice from a tax advisor to avoid making mistakes and possibly incurring tax debt. The tax office will also help clarify any tax-related questions.

3. Insure yourself and your company 

Being self-employed also means that you need to take care of many things. This includes you and your company being ready for all eventualities – for example, in the event of illness or unemployment. Incidents such as theft, burst water pipes and fire damage are rare, but can quickly jeopardise the existence of a new company.

Health insurance and accident insurance as well as retirement provisioning and business liability insurance are therefore indispensable.

The start-up portal explains which insurances are important for you.

4. Inform yourself of the contracts and laws that affect you

As an entrepreneur in Germany, you are bound to have to deal with numerous contracts, laws and legal regulations (e.g. lease agreements for your office space, product liability, etc.). The big advantage is that if all business transactions are contractually defined, you are guaranteed a high degree of legal certainty.

You can find an overview of all the important laws and contracts that affect you as an entrepreneur on the start-up portal. Additional information will be provided by the Chambers of Industry and Commerce. If you need additional support, please consult a lawyer.

5. Fulfil your duties as an employer

If you would like to employ your own staff in your company, you must respect a number of rules and obligations. In order to be allowed to hire staff in the first place, you will need a company registration number. On the start-up portal, you can find out how to obtain this number and which steps still need to be taken afterwards. Remember that as an employer in Germany, you are obliged to pay taxes and social security contributions every time you pay wages.

Of course, you will also need to respect a number of legal regulations in regard to your employees. For example, you must continue paying your employees' salaries and wages even if they fall ill; in addition, your employees have a right to annual leave. It is also important to note that employees cannot be made redundant without a valid reason. Make sure to be well informed of your obligations regarding your staff.

Hamburger Stadtlandschaft